Tuesday, June 26, 2018

A Quick Mid-Year Market Update for 2018

Can you believe we’re already halfway through 2018? With that being the case, it’s time for a mid-year real estate market update.

Looking to buy a home? Check out our free home search
Looking to sell a home? Check out our free home value report

The local housing market is like a big game of tug of war between buyers and sellers. Sellers have been controlling the market since 2012 with multiple offers and buyers tripping over themselves to be the winning bidder. As a result, prices have accelerated and reached record levels.

However, there is change in the air, and now buyers are beginning to pull back. In the tug of war, sellers are still “winning,” but not if they overprice their homes.

Home sellers are no longer getting away with arbitrarily stretching their asking prices. You know what I’m talking about and I’m sure you’ve seen it before. Today’s buyers are approaching housing a bit differently than they did from 2012 through 2017. They are much more cautious these days.

The biggest culprits of this caution are interest rates and values. Values have increased significantly. The median sales price was up nearly 6% from April 2017 to April 2018. This follows six solid years of home price appreciation.

It may still be a seller’s market, but buyers are starting to pull back.

At the end of May 2017, interest rates were in the mid to high 3% range. Meanwhile, today we are in the high 4% range with talks of the Federal Reserve increasing them to the low 5% range. With higher values and higher mortgage rates, today’s buyers still want to buy; but, they are getting to the point that they just do not want to pay much more than the most recent relevant sale. Buyers are approaching housing very carefully and home sellers are wondering what happened to the hot seller’s market that everybody has been talking about for years. Home sellers who are not priced extremely close to their fair market values or do not have a unique selling proposal are not finding success. One of the major indicators that overpricing is spreading can be found in the number of price reductions. Right now, 12% of the active inventory is reducing their asking price every single week. The bottom line is clear: It may still be a seller’s market, but home sellers must carefully price their homes in order to be successful in this evolving market. In the tug of war between buyers and sellers, buyers are starting to pull back. If you’d like to know how this information could impact your home sale or your home search or if you just have any questions, give me a call or send me an email today. I’d love to help.

Thursday, June 15, 2017

5 Things You Should Never Say to a Buyer During Your Home Sale

There are five things you must never say out loud to a prospective buyer while your home is on the market.

Looking to buy a home? Check out our free home search
Looking to sell a home? Check out our free home value report

You know the expression “Loose lips sink ships?” Well, that saying holds true for the real estate world too. If you’re selling your home, there are certain things you must disclose to a buyer, such as whether your home has lead paint, there has been a death on the property in the recent past, the home is located near a busy street, etc. However, there is plenty more information you might volunteer that you’d be much better off keeping your mouth strategically shut about. The same goes for the Realtor representing you. To help hone in on your “less is more” attitude when it comes to talking to prospective buyers or their agents, here are five things you should never utter (in no order of importance): 1. “Our house is in perfect condition.” Of course it is. Your home is your castle, and in your eyes it may seem perfect, but don’t make claims that aren’t true. The home inspection might reveal otherwise, and you don’t want to wind up putting your foot in your mouth. There is no such thing as a perfect condition when it comes to a home. Every home—whether it’s brand new or a resale—has something that could be fixed, adjusted, replaced, or improved upon.

There is no such thing as a perfect condition when it comes to a home.

2. “It’s been on the market ___ days.” Never ever discuss how long your home has been on the market with a prospective buyer or their agent. This information is already provided on the MLS or the home’s information sheet, and bringing it up—especially if the home’s been on the market for a while—can send the wrong message. No one wants to buy the white elephant of the neighborhood. If they do, it’s probably because they think they can get it dirt cheap.

3. “We’ve always wanted to fix or renovate that, but…” Mum’s the word when it comes to fixes you intended to address. This only alerts the buyer of more upcoming costs for them, and they may not even want to take on a bathroom or kitchen renovation. Why plant those extra dollar signs in their head?

4. “We spent a ton of money on (the patio/kitchen/etc).” Just because you love the Brazilian cherrywood flooring you installed on the first floor doesn’t mean prospective buyers will be willing to shell out for that. The buyer doesn’t care whether you spent $10,000 or $100,000 on your kitchen—they’ll only offer what they think the home is worth in relation to the area comparables. You would do the same thing. Save your breath, or else you’ll sound like you’re trying to justify your price, and nobody wants to hear that.

5. “I’m not taking less than ___ for my home.” I understand that you want to sell for top dollar, but it’s important to be realistic and open to offers within a reasonable range—something that’s fair to you and you would be happy with. If you send a message right out of the gate that you’re inflexible or not open to negotiation, it doesn’t invite buyers to even try to work out an acceptable price and terms with you. They may feel defeated from the very start and word might spread about your sentiment as a seller. This can cause people to avoid your house altogether. If you have any questions or need to sell your home, don’t hesitate to give me a call. I’d be happy to help you.

Wednesday, May 31, 2017

Real Local Real Estate Market Update

What's going on in our market right now? It's still red hot, but it's a tale of two price points.

Looking to buy a home? Check out our free home search
Looking to sell a home? Check out our free home value report

It seems like everyone wants to know what's happening in our real estate market right now. Think of it in terms of two scenarios. For example, let’s say a nicely upgraded home in mint condition comes on the market for $650,000 and the initial open house is crazy, creating urgency among buyers. By Monday morning, there are multiple offers on the home, and by week's end, the seller accepts an offer that's over asking price that will close in fewer than 30 days. Next, picture a stunning luxury home listed for $1.8 million. A few people come through the open house and the traffic is solid in the first week, but there are no offers until it's been on the market for three to four months. After going back and forth on negotiations, the seller accepts an offer that's $100,000 below asking price, taking 60 days to close. Both of these scenarios are typical in our market for their respective price ranges. The market is hot, but the higher the price, the longer it takes to sell a home. It all depends on the price points, and if it's not compelling, it's not selling. The market is sizzling hot for homes priced below $750,000, with these homes receiving multiple offers. The lion's share of sales we've seen this year has been at that price point below $750,000, too.

The market is still sizzling hot, but the higher the price, the longer it takes to sell a home

The $750,000 to $1 million price range is still hot, depending on the city. However, on average, it takes a couple more weeks (or even months sometimes) to negotiate a deal compared to the lower price range. There simply aren't as many buyers looking to purchase a home in that price range.
It's a completely different story above the $1 million price point. That market is decelerating as we speak. The expected time for a home in this price range to sell is four months to a year. There aren't enough buyers in this price range for all the competing sellers. Regardless of the price range, though, there will be a lot of new homes coming on the market now through September. The active supply of homes will grow, but demand will stay about the same. The expected market time it takes to sell a home will grow as well, and you can expect to start to see some price reductions for more serious sellers who realize that more homes on the market means more competition for them. No matter the price point, it's imperative for sellers to price their home according to the marketplace with an exemplary marketing plan to avoid wasted market time. Interest rates are still low and homes are still selling, but the window of opportunity won't stay open for much longer. If you have any other questions about the market or you're thinking of buying or selling real estate in the LA and Orange County market, give me a call or send me an email today. I'd be more than happy to help you!